According to the Sydney Morning Herald, Opposition Leader Bill Shorten is set to unveil a bold climate policy goal requiring half of Australia’s large-scale energy production to be generated using renewable sources within 15 years. Apparently, he is to announce this plan over the weekend at Labor’s conference. He is also to say (and has already said) that there will be no carbon tax introduced by a Government that he would lead. He prefers an emissions trading scheme.
Two things strike me about this ‘bold’ plan. The first is that it is simply unworkable. There is no way that within fifteen years renewable sources will make up fifty per cent of Australia’s grid power (I assume that is what he means by ‘large-scale energy production). I invite Mr Shorten to read what I have written about wind and solar on this website, here, (and go to the Rud Istvan link he will find there), and read what A Planning Engineer had to say on Judith Currie’s Climate etc. website here. It just isn’t possible. We can’t store renewable energy in large amounts, and the more that renewable energy sources ‘penetrate’ the grid, the more back-up from fossil fuels the grid will need.
Here is the current situation, according to Origin Energy in January this year.
If 50 per cent is to come from renewable energy, that means that the share of coal + natural gas will drop from 86 per cent to 50 per cent. Given that there are no hydro dams planned, and that none is likely (though there are several possible sites), that means that wind + solar + bioenergy will need to rise from 7 per cent to 43 per cent. Mr Shorten must have magicians in his team. Perhaps he will tell us in his speech at the weekend. Perhaps fossil fuels will only be used when the sun isn’t shining and the wind isn’t blowing. Perhaps someone in the ALP has invented the perfect battery. But I have to say that it looks completely fanciful to me.
The second puzzle concerns his rejection of a carbon tax but his welcoming of an emissions trading scheme. In practice, at least as it affects people like you and me, there is no difference. The intention, and the outcome, is to raise the price of energy. That means all consumers are poorer and the poorest consumers are relatively the worse off. How this is good for the ALP’s traditional working-class supporters is not clear to me. No doubt Mr Shorten will devise some transfer mechanism so that the poorest are compensated. But raising energy prices raises the price of everything, sooner or later, because energy is a principal element in all production and in the delivery of all services.
If he thinks that the Australian people will agree that emissions trading schemes are good and carbon taxes are bad, and that there is a real difference between them, then I suggest that he is badly mistaken. The Coalition Government would like nothing better than an election fought on what it will proclaim as the return of ‘those taxes’.
Why is Mr Shorten doing this? One answer is that many within the ALP see a continual bleeding- away of their electoral support to the Greens unless Labor makes a stand on ‘climate change’. I read somewhere that 300 branches have petitioned the party to do exactly that. And there are many Labor supporters who, like Mr Shorten, ‘believe’ in ‘climate change’. They’re not interested in facts or evidence. They have faith, and that is enough.
I have seen some pretty silly things in Australian politics over the last sixty years. This decision is up there with the best of them.
Legal footnote: I have written a couple of times about ‘climate change refugees’, of which the only known examples have been testing their claims in the courts of New Zealand. Mr Teitiota, a native of Kiribati, had overstayed his visa and was doing his best to stay in New Zealand with his wife and three children born in New Zealand. The court said, in part,
In relation to the Refugee Convention, while Kiribati undoubtedly faces challenges, Mr Teitiota does not, if returned, face serious harm and there is no evidence that the government of Kiribati is failing to take steps to protect its citizens from the effects of environmental degradation to the extent that it can.
However, it said its decision should not be taken as ruling out the possibility of people being granted refugee status due to environmental degradation or climate change in the future.
And a Netherlands court has issued a bizarre decision in the ‘climate change domain.
Citing science as the basis of its verdict, a District Court in The Hague has said that the state must take measures to reduce greenhouse-gas emissions by at least 25 per cent by 2020, relative to 1990 levels, in order to prevent possibly dangerous climate change. A Dutch citizens’ climate-change group filed the lawsuit in 2013 on behalf of nearly 900 plaintiffs, including children. The group specifically sued the government for violating human rights by failing to take adequate action to prevent the harmful impacts of climate change.
The Dutch government can appeal the ruling — although it has not yet said whether it will do so. Nor is it clear what happens if the government fails to take action. But legal experts say that it is the first time that a judge has required a state to take precautions to mitigate the effects of climate change. Apparently a similar lawsuit has been filed in Belgium.
No doubt we shall see a similar try-on in Australia. I don’t know how the Dutch court determined that ‘the science’ was correct. But the episode does suggest that once a body of information acquires the status of ‘settled science’, nobody much wants to examine it closely. It is enough to say that ‘science shows’, and others nod in agreement.
My thanks to Professor Bob Carter for the links to these two stories.
Join the discussion 32 Comments
Good, pinioning argument. Don, in my school debating days, I would have been very nervous with you on the opposite team.
Allan here is a debating tip.
Don makes no allowance for technological change in his argument.
By all means let us have technological development and improve methods if we can but there is a limit to what the taxpayer can be expected to contribute. The whole rationale for taxpayer subsidies to renewables is that they will delay or prevent the climate from melting us but nowhere do the proponents say what effect on the climate 50% renewables will have. By the way, the GST is a fair tax; the more you consume the more you pay and everyone has to pay it up front.
Fairness of GST? If everyone one started from the same level of wealth I would agree with you.
But you should be able to see that it would be a lot easier for a rich person to reduce their consumption by 5% than a poor person. The rich person will have to sacrifice a few “luxuries”, whereas the poor person will have to sacrifice some “necessities”.
Yes, David, but my understanding is that the 50-odd percent of us that are low income earners pay no net tax now after allowing for various government benefits, so are you saying that this 50% should never pay any net tax, or its OK to tax them via higher electricity charges?
Q1 I think the lower 50% should pay some net tax
Q2 Yes, I think some of that tax should take the form of higher electricity charges.
Ok, that’s settled David, – you want to tax the poor to pay for an increase in electricity prices caused by an ALP policy that will achieve nothing else but hopefully prevent even more Lefties from leaving the ALP and joining the Greens, who want to tax everyone even more, because of a Greens policy that will achieve even less than the ALP’s, except for causing more damage to the Australian economy? Great work!
If an $8 billion carbon tax is, so bad for the poor people, what do you make of a $25 billion dollar increase to the GST? They are both consumption taxes, the former is target at CO2 and the latter broad based.
I would argue that a carbon tax is just as much a tax on production as it is on consumption, and it reduces Australia’s competitive advantage of cheap energy.
a.) How ever you choose to label it, an increase in GST from 10% to 15% will have three times the effect on household budgets than a carbon consumption(production) tax.
b.) Your analysis of “comparative advantage” confuses prices with costs. Fossil fuels may have a cheap price but they have a high cost.
That’s the whole reason for intervention.
a) It’s not just a label. A tax on production is a tax on local jobs. A tax on consumption depends on where the jobs producing the goods and services are produced. Mostly overseas these days.
b) Alleged high cost. It’s a risk not a certainty, and it’s looking less and less likely as atmospheric CO2 continues to increase and there is no significant global temperature anomaly response.
a) is incorrect. Imports are about 20% of GDP.
b) I am risk averse. Is your house insured or do you plan to wait until the fire brigade arrives before buying some insurance? 🙂
a) Okay, I was talking figuratively. 20% is not significant enough to argue about. Especially, as I recall, the carbon tax/ETS was not levied on exports.
b) I do insure my house against fire, but not against meteor strike – something about as likely as dangerous anthropogenic global warming IMHO 🙂
I also don’t insure my house against flood, even though flood waters almost entered my house in the 2011 flood here in Brisbane. The reason being that being in a flood zone the insurance premiums are very high, and the previous flood to 2011 was in 1974. So I figure I’m better off investing the money than paying the premium for an expected 30 to 40 years. Like AGW, maybe the mitigation cost is higher than the damage it will cause. If, indeed, there is any damage from human emissions of CO2, or global warming.
Is it asking too much for our politicians making these momentous decisions to at least do a little homework to inform them enough to explain the change, what it will do and how it will work. The shadow environment minister Mark Butler was so lacking in answers on Sky the other day it made me cringe..absolutely no idea. David, I agree that technology will solve many problems as we go forward but is it wise to rely entirely on a breakthrough? The fact that many now accept such tripe is a sad commentary on politics in Australia. The concept will suite many academics including some in the scientific community….it will be interesting to hear their views.
If the increase in renewables is to be sourced from wind and solar, then I see another problem. These two forms of generation typically have an availability of 20% to 25%. So to get to 50% there will need to be virtually double the capacity required, and half of this stored for use when the sun isn’t shining and/or the wind not blowing. Having backup fossil fuel generation will not be good enough as it will push it over the 50% limit.
The other factor to consider is that while Open-Cycle Gas Turbines have the ability to vary output to match wind/solar intermittency, coal-fired (Rankin cycle) power stations do not. It’s like comparing a jet engine response with boiling a kettle. So effectively, it will required the replacement of all coal-fired power stations with OCGTs.
I think the only way Australia will get to 50% of ‘non-CO2-emitting’ generation is to have baseload nuclear generation, like they have in every other major economy in the world.
France is the only major economy to have more than 50 per cent of its grid power generated by nuclear energy, though other major economies have it as part of their portfolios.
Apologies Don, I should have separated that last paragraph into two sentences. I meant to say that every other major economy has baseload nuclear generation. Not that they have 50% ‘non-CO2-emitting’ or 50% nuclear generation.
Italians voted against nuclear power after Chernobyl. To make up there electricity shortfall they import 10% from France!
Hopefully you will acquaint Bill Shorten of your views of his “bold climate policy goal.” Much is written about what politicians should be told about errors in the consensus views, but do not write to those in power. Recently I expressed my views on climate change to my local member, but I doubt that I shall get an answer!
I never know who reads the essays on this website, now in its fourth year. And my cheeky use of ‘Clayton’s’ probably means that automatic searches for ‘Bill Shorten’ in the title won’t work.
One just has to press on.
Try “Shark Attack” in the title.
Actually I’ve now had a tweet from billshortenmp, the gist of which is that the world bank’s stuff is aimed at the producers of energy, not the consumers. But of course, what the producers do must raise the price of energy to the consolers…
The ‘consumers’. I don’t who the ‘consolers’ are, probably the Pope et al…
The Capital Wind Farm adjacent to Lake George near Canberra has 67 turbines, each capable of 2 megawatts (mW), and occupying 60 square kilometres. Assuming this output is achieved 20% of the average day (when the wind blows, the turbine will turn), the whole farm can produce 650 mWh per day. The Colongra coal fired power station in NSW which generates electricity fulltime, produces 15,800 mWh per day. That’s about 25 times as much. So to replace that fossil-fueled plant, we’d need 25 such windfarms. If each occupied 60 square kilometres, the area required would be 1500 square kilometres. That’s a bit less than a square that is 40 kms by 40 kms.
Do Bill Shorten and Richard Marles have any idea of what they’re talking about?
For some time I have been working on what it would take to build a windfarm that is a plug-in replacement for a coal fired power station. To do this I have the National energy market data which includes the Capital windfarm data. I have been using the data from all New South Wales windfarms and the Bayswater Power Station. It generates about 1.8 GW hours per day. Now I have looked at the absolute data for the Capital windfarm. It turns out to be one of the more efficient windfarms in New South Wales. If I take all of them I get about 17% of the plate capacity but the Capital windfarm is 25%. I don’t disagree with the thrust of what you’re saying that is wind power occupies a very large area. Even though on the face of it your figures are fairly correct in fact we need something far larger than this. The reason is the fluctuation, even though Capital windfarm will produce 25% you cannot just say take the figure above of 1.8 and build a windfarm that is four times bigger than that.
Some days capital windfarm achieved 93% but there were 58 days in 2014 that were below 5%. This fact blows the simplistic calculation above out of the water. The only way it can possibly be achieved is to build a very large windfarm which returns a big excess of electricity on the few days when the wind is just right. Then you must store that electricity for the many times when there is damn all. I progress has been slow because it requires a lot of thought and it is turned into something that is quite complex.
For your interest here is a graph of Capital windfarm’s output for 2014.
It’s interesting / ironic that you use source documents from Origin Energy in this essay. You can buy 50% “Green Energy” electricity from them. In fact, you can buy a “100% Green Energy” electricity supply from them. Right now.
But it costs more money. So not so many people buy it. In other words, people will go green if SOMEONE ELSE pays for it.
BTW, I’m not being sarcastic by putting quotes around “Green Energy”; it’s a bit like “organic” vegetables – the definition varies between people. For example, is hydro energy green if you count the carbon released during and by the building of the dam ?
I wouldn’t consider hydro dams “green energy” unless they were constructed over clapped out farm land. Similarly renewable fuel made from palm oil is not “green energy” in my opinion.
What you say about “green energy” is also true for other public goods such as roads and defense. A nation would have an inadequate defense force if they relied on voluntary contributions. That’s why we have taxation and governments.
Just a minor point about your maths, don’t you mean to say, wind + solar + bio-energy will need to rise from 7 per cent to 43%, (rather than 50%)?
The remaining 7% being Hydro and the other 50% would be from Coal and Natural gas.
Yes, you are quite right. I’ll make that adjustment to the text.
“The intention, and the outcome, is to raise the price of energy.”
The intention is to raise the price of some forms of energy relative to others, based on how much perceived damage they do to the environment (i.e. how much CO2 they produce). As your graph above points out, most of our energy comes from coal which produces a lot of CO2, so the side effect (or “outcome” to use your terminology) is indeed to raise the price of energy.
“no doubt…will devise some transfer mechanism so that the poorest are compensated.”
That’s potentially a pretty important part of the policy and shouldn’t be discarded lightly, and it needn’t be just for the poorest.
“But raising energy prices raises the price of everything”
So make sure your compensation covers the resulting price rise of everything.
I think when assessing it as an effective policy measure you need to divorce yourself from any opinions on whether or not we should be striving to reduce CO2. At least briefly, let’s assume we all agree reducing CO2 emissions is good thing, now lets discuss the best policy to achieve that.
With the last carbon tax, most of us were over-compenstated for the total CPI increase caused by the carbon tax (not just the 2c / kWH it added to our electricity bills), so there was no pressure on us to change our consumption habits.
It was clearly aimed at the producers, and the data showed to that end it was very effective. But even many of them are somewhat constrained; they can’t knock up a wind farm or a gas powered plant overnight. An even bigger target audience was those investing in new plant. Spare a thought for them as they invest their hard earned cash in plant and equipment that’s expected to last 20 to 40 years, and a major input cost to at least one of their options varies each 3 years depending on who gets elected.